Independent Long Island pharmacists face slow recovery from Change Healthcare cyberattack
Joseph Navarra, owner and pharmacist at Town Total Compounding Center in Woodbury, had to take out a line of credit to keep afloat after the Change Healthcare hack. Credit: Debbie Egan-Chin
One pharmacist had to take out a line of credit to keep his business afloat. Another has offered customers their medications at sharp discounts. Many sent their customers to other pharmacies, unsure if they would ever return.
Independent pharmacists across Long Island said the cyberattack last month on Change Healthcare caused weeks of problems even as the company has restored most of its systems that process prescriptions and payments.
Howard Jacobson, who owns two pharmacies on Long Island, including Rockville Centre Pharmacy, said the cyberattack was the most serious disruption he had seen to his business.
“It’s pretty unsettling because United Healthcare is such a huge player in the drug distribution system, and in health care in general,” he said.
Change Healthcare, which is owned by UnitedHealth Group, is a vital link between many pharmacies and insurance companies. Virtually unknown to the public before the hack, the company processes 15 billion health care transactions annually, according to the U.S. Department of Health and Human Services, including for hospitals, physicians and other health care providers, as well as pharmacies.
Company officials said a suspected “cybersecurity threat actor” had gained access to some of its systems on Feb. 21. Those systems were shut down while it tried to resume operations. The hacker was later identified as ALPHV, also known as BlackCat. Groups like BlackCat steal or encrypt sensitive information and threaten to publish it if a company doesn't pay them, the U.S. Department of Justice said.
Joe Navarra, a pharmacist and owner of Town Total Compounding Center in Woodbury, said he had to take out a line of credit because he lost so much income after weeks of not being able to process claims.
“I'm a small pharmacy and honestly, every penny here counts,” Navarra said. “I make medication from scratch, so I have very high-tech costs here. … I'm paying interest on that line of credit. … I had to pay overtime to my employees to rebill all the claims when Change Healthcare finally came back online.”
Navarra said Wednesday that for weeks, he had unsuccessfully applied multiple times for no-interest cash advances offered by Change Healthcare. On Thursday morning, he received a loan to cover costs during the first week of the disruption. But he is still far from recouping his losses.
“I promised my patients that paid cash out of pocket that I would refund them the second Change Healthcare went back online,” he said. “I kept my promise.”
On its website, UnitedHealth Group said it has advanced more than $3.3 billion to providers and that it started processing more than $14 billion in claims, which were backlogged due to the cyberbreach.
“UnitedHealth Group continues to make substantial progress in mitigating the impact to consumers and care providers of the unprecedented cyberattack on the U.S. health system and the Change Healthcare claims and payment infrastructure,” the company said on its website.
When the cyberattack problems started, pharmacist Michael Piampiano, who owns Town Drugs in East Northport, said he did not charge some customers full price for medication, assuming he would be able to bill their insurance companies shortly.
“I thought it would be over in a week to 10 days,” he said.
He offered customers the lowest pricing possible, but not everyone was able to afford it. The outage didn't allow him to process some coupons, raising the cost of prescriptions.
Recovery has been slow, Piampiano said. He said some medications covered by Medicare Part B benefits as well as some coupons and vouchers are still not “up and running.”
Jacobson, who owns the Rockville Centre Pharmacy, said he was able to move from Change Healthcare to another network shortly after learning about the hack.
“The problem we have is some of the coupons and vouchers for prescriptions are only processed through Change Healthcare, and we have been unable to process them,” he said. “And up until this past week, some of our Medicare claims for diabetic supplies weren’t able to be transmitted to our clearing house, but that has resolved itself.”
Coupons and vouchers often can reduce prescription copays in half, from $40 to $20 or even $0, he said.
On Wednesday, the U.S. State Department offered a $10 million reward for information leading to the identification or location of any person who engages in certain cyber activities against U.S. critical infrastructure while under the direction or control of a foreign government.
With AP
One pharmacist had to take out a line of credit to keep his business afloat. Another has offered customers their medications at sharp discounts. Many sent their customers to other pharmacies, unsure if they would ever return.
Independent pharmacists across Long Island said the cyberattack last month on Change Healthcare caused weeks of problems even as the company has restored most of its systems that process prescriptions and payments.
Howard Jacobson, who owns two pharmacies on Long Island, including Rockville Centre Pharmacy, said the cyberattack was the most serious disruption he had seen to his business.
“It’s pretty unsettling because United Healthcare is such a huge player in the drug distribution system, and in health care in general,” he said.
WHAT TO KNOW
- Last month's cyberattack on Change Healthcare caused weeks of problems, according to independent pharmacists across Long Island.
- Change Healthcare, which processes 15 billion health care transactions annually and is owned by UnitedHealth Group, is a vital link between many pharmacies and insurance companies.
- Most of the systems that process prescriptions and payments at Change Healthcare have been restored, company officials said.
Change Healthcare, which is owned by UnitedHealth Group, is a vital link between many pharmacies and insurance companies. Virtually unknown to the public before the hack, the company processes 15 billion health care transactions annually, according to the U.S. Department of Health and Human Services, including for hospitals, physicians and other health care providers, as well as pharmacies.
Company officials said a suspected “cybersecurity threat actor” had gained access to some of its systems on Feb. 21. Those systems were shut down while it tried to resume operations. The hacker was later identified as ALPHV, also known as BlackCat. Groups like BlackCat steal or encrypt sensitive information and threaten to publish it if a company doesn't pay them, the U.S. Department of Justice said.
Joe Navarra, a pharmacist and owner of Town Total Compounding Center in Woodbury, said he had to take out a line of credit because he lost so much income after weeks of not being able to process claims.
“I'm a small pharmacy and honestly, every penny here counts,” Navarra said. “I make medication from scratch, so I have very high-tech costs here. … I'm paying interest on that line of credit. … I had to pay overtime to my employees to rebill all the claims when Change Healthcare finally came back online.”
Navarra said Wednesday that for weeks, he had unsuccessfully applied multiple times for no-interest cash advances offered by Change Healthcare. On Thursday morning, he received a loan to cover costs during the first week of the disruption. But he is still far from recouping his losses.
“I promised my patients that paid cash out of pocket that I would refund them the second Change Healthcare went back online,” he said. “I kept my promise.”
On its website, UnitedHealth Group said it has advanced more than $3.3 billion to providers and that it started processing more than $14 billion in claims, which were backlogged due to the cyberbreach.
“UnitedHealth Group continues to make substantial progress in mitigating the impact to consumers and care providers of the unprecedented cyberattack on the U.S. health system and the Change Healthcare claims and payment infrastructure,” the company said on its website.
When the cyberattack problems started, pharmacist Michael Piampiano, who owns Town Drugs in East Northport, said he did not charge some customers full price for medication, assuming he would be able to bill their insurance companies shortly.
“I thought it would be over in a week to 10 days,” he said.
He offered customers the lowest pricing possible, but not everyone was able to afford it. The outage didn't allow him to process some coupons, raising the cost of prescriptions.
Recovery has been slow, Piampiano said. He said some medications covered by Medicare Part B benefits as well as some coupons and vouchers are still not “up and running.”
Jacobson, who owns the Rockville Centre Pharmacy, said he was able to move from Change Healthcare to another network shortly after learning about the hack.
“The problem we have is some of the coupons and vouchers for prescriptions are only processed through Change Healthcare, and we have been unable to process them,” he said. “And up until this past week, some of our Medicare claims for diabetic supplies weren’t able to be transmitted to our clearing house, but that has resolved itself.”
Coupons and vouchers often can reduce prescription copays in half, from $40 to $20 or even $0, he said.
On Wednesday, the U.S. State Department offered a $10 million reward for information leading to the identification or location of any person who engages in certain cyber activities against U.S. critical infrastructure while under the direction or control of a foreign government.
With AP
Lisa joined Newsday as a staff writer in 2019. She previously worked at amNewYork, the New York Daily News and the Asbury Park Press covering politics, government and general assignment.
